As many veteran readers know, I enjoy distracting myself with automotive news. Cars are neat. I've only owned two in my life (one of which was purchased used) so I'm not exactly a useful consumer to the auto industry. But I do like to read about the technology and the industry itself, which is in many ways a good reflection of the larger trends in the manufacturing economy.

Over the past two years there have appeared any number of stories from auto industry analysts about how elderly buyers are starting to outnumber younger ones. Whereas the primary target for auto sales in the past was the 25-55 age group – the period in which people traditionally have growing families and their peak earning potential – it has consistently shifted higher in the past two decades. The key demographic in the U.S., if you ask any industry insider off the record, is the 60+ crowd. No one wants to admit that; in fact, name brands like Lincoln and Oldsmobile (RIP) and models like the Crown Victoria / TownCar struggle specifically because they are perceived to be the domain of Old People. But the fact remains: a 65 year old man is a lot more likely to be in the market for a new car than a 25 year old one in 2013.

Annoyingly, these reports are inevitably accompanied by some sort of sociological explanation for why younger people – say, the 21-39 crowd – are not buying cars. The same is true of stories about why college grads live at home, or why younger people are renting rather than buying homes. It's usually something about different preferences, more "flexible" lifestyles, residential patterns, or some squishy hypothesis that we love Mother Nature too much to soil her with an automobile. And they all tapdance around the bleedingly obvious fact that Baby Boomers now buy more cars than their children because they have money and their children don't. I'd wager that plenty of people in their 20s and 30s would buy a new car on occasion if the opportunity arose.

But it doesn't. The labor force has been radically restructured (by the Boomers, not insignificantly) so that we work, when we can find work at all, longer hours for less money with no job security. How does one save up for a car or mortgage down payment on the kind of salaries most people who weren't born into wealth earn in their 20s? How are young people expected to make a 5 year auto loan commitment (or 30 for a mortgage) when their employment is "at will" or when people spend years working as "permanent temps"? As I've said before, even the people in my age group I know personally who are doing well – and as someone with full-time employment and health insurance, I consider myself fortunate to be in that group – have tremendous insecurity about the future. In other words, even those of us who might be able to afford a new car now refuse to buy simply because we don't know if our job will still exist (or who will be doing it) in a couple of years.

It is amusing to see how far analysts and journalists will go to avoid grappling with the relatively obvious fact that young people aren't buying what they're "supposed to" be buying because we, as an economy, are not paying them much. Or employing them at all. Or giving them any kind of long-term security necessary to induce them to make financial commitments to homes, cars, or other expensive purchases. This kind of denial of the obvious is becoming a trademark of Boomer-led journalism and financial analysis, the wailing and gnashing of teeth over the failure of consumers to rescue the economy by buying the things they're supposed to be buying. Yet rarely do they consider the simplest solution, that younger people do not make these kinds of economic commitments because this society is now structured to make doing so impossible. God help the auto industry when this wave of retirees dies out.

This entry was posted on Thursday, August 15th, 2013 at 1:59 pm and is filed under Rants.
You can follow any responses to this entry through the RSS 2.0 feed.
Both comments and pings are currently closed.

Absolutely true, Ed, but the fact is that any discussion of why young people have less money than their parents and grandparents did *at the same point in their lives* falls afoul of the idea that kids are "the entitlement generation," which has incredible currency among men and women, but especially men, in the over-45 area. Ask these men how they got where they are, and they will talk about how they got there through their own hard work, and these kids who are "whining" about huge tuitions and back-breaking loans coming out of university, who worry about working two jobs at minimum wage to make enough to pay rent, these kids need to pick up their entitled asses and get at it. This from a generation that didn't need a $150,000 loan to get an undergrad degree, that didn't have to worry about paying $200 a month for health care, that didn't have 10 per cent of its members incarcerated for things that *most of their parents did at their age* anyway. This from a generation of aging, entitled assholes, actually, who seem to enjoy seeing their kids and grandkids struggling, living the tough youth that the 70 year old wants to pretend that he lived, when in truth he had an easier time of it than any generation, before or since. Oh, and that debt? Who built it up? Yup. they did. Now it's up to the kids to begin to pay it down.

Bourgeois intelligentsia have an interest in not actually finding the truth behind such phenomena because doing so would point to a conclusion which would attack the foundation of capitalist society, namely, that capitalism is an exploitative system.

I love to drive and would love to have a car, but two things get in the way. I live in a big city and don't really need it. Secondly, I can't afford it, and I'm 44. What with payments, plus gas, plus upkeep, plus insurance, plus city parking, and we're looking at upwards of 1000/month for a modest car. I mean, I *could* afford it — if I had a job — but it seems like foolishness when it's not an absolute need. So I guess I'm lucky that the former makes the latter a moot point, so it's just a matter of tamping down desire.

I also *stay* in the city in part because I can forgo a car, aka depreciating asset, aka pounding money down a rathole.

That said, sometimes a lady has to go to a Target and god bless Zipcar, is all I'm saying.

While kids today may not be able to afford new cars or houses, most of them can't realistically afford iPhones (and associated 2-year contracts/service), computer gaming systems, frequent dining out, Jameson, and plenty of other things.

Oh, let's not be abstract. Lets use, as an example, a relative of mine, who declared that he/she was "broke", recently. Earlier this summer, he/she bought the newest iPhone and gave the older one to his/her parent. New clothes, trips, etc….but not willing to buy a car. (Bought a house, but lost it after stopping to make the mortgage payment, a few years ago.)

So there may be a legitimate decision point among some folks to *not* buy a car (or house, or whatever), independent of their ability to pay.

Forwarrick makes an excellent point. Old people, like me, overstay their welcome. In governmental offices one can notice elderly people who exceeded their usefulness. When you watch news TV, you find out that most of the guys at the top have been there for 20-30 years. Young people wait.

In universities one have 80+ old profs who never made sense even 20 years ago. Why?

I'm not an iPhone user and I hate Apple so it pains me to say this but…Buying an iPhone makes more sense than buying a car. Anyone who's ever been poor knows how no matter how necessary a car may be, it is basically a money hole. It is this time bomb that goes off over and over again, hitting you with a major bill at least once a year which will leave you flat broke.

Please note, a lot of boomers drive old cars, only a small percentage of us made the decisions that put the nation in this hole, a lot of us (though likely not enough) would vote for a liberal candidate, should such a near-mythical creature survive the primaries, some of us never voted for Reagan or Bush or "shrub".

It always bemuses me to see relatively intelligent, semi-enlightened people who wouldn't dream of saying anything remotely racist or sexist, and who wouldn't ever consider discriminating on the basis of religion or national origin, slip so comfortably into age-based chauvinism.

It happens here with depressing regularity.

Not every 66-year-old is like your fucking retard tea-bagging uncle or any of the few other aging, entitled assholes who seem to enjoy seeing their kids and grandkids struggling, living the tough youth.

Enjoy seeing their grandkids struggle. Where in the hell have you ever seen that?

HD is absolutely correct when he says the millennial definition of "broke" includes quite a bit that fall far outside the range of life's necessities. I walked past OWS SF when I went into our downtown office and their encampment might as well have been an Apple store. I've traveled deep into central Asia…I've seen legitimate BROKE, and tweeting on an iPhone isn't it.

I am going to disagree with RJohn's notion that an undergrad degree costs $150,000 in debt. When I graduated in the 90's I had both an Ivy League acceptance in one hand and a full ride state school in the other. I opted to go to school essentially for free. I had a 20hr a week PT job that covered my living expenses, graduated with a STEM degree in 4yrs, and thanks to having no debt was able to start a .com company in the late 90's that propelled my career ahead rapidly. Anyone with admission to a school that costs that much money PROBABLY has a lower ranked school willing to cut them a check. The same thing repeated itself in the 2000's when I went to law school, T14 at cost or T2 for free.

I would contend that "most" millennials seems to almost fetishize what they perceive to be prestigious universities, regardless of the cost. Maybe in the case of a handful (HYSP + MIT/CalTech) it might be ok to go full boat in debt; but I'd argue even from a lower-Ivy like I had admission to, a non-STEM diploma is likely a huge risk from an employment perspective. Major consulting companies and iBanks are not hiring BA's in History just because they went to Brown anymore. Good luck paying off a Brown diploma w/o a career path that has a very solid 6 figure salary trajectory.

The issue in all this that I think bugs Gen-X and maybe boomers to a lesser extent is the concept of debt forgiveness. Why does someone who make the irresponsible decision to go for an expensive school vs. a less prestigious/less expensive alternative get their debt forgiven? Do they have to turn in their Ivy diploma and forgo the benefits that gives them with HR and career options? Do those of us that could have gone to an Ivy get an honorific diploma we can trade on now? It's another scenario where the irresponsible get bailed out while others who made prudent decisions will continue to live with the tradeoff that they made (e.g. immediate resume dustbin @ Goldman, Blackrock, Mckenzie, etc. w/o Ivy or similar).

Having spent the last 20yrs having a chauffeured Mercedes I recently purchased a secondhand car. A joy of living in the country. As Arslan pointed out, what a money pit. On my first major drive something went kerplop! Can we say DARK?? Not ordinary city dark, but moonless country dark. This is the kind of dark where stars are super bright dark, and I was still an hour's drive from home. The part in question was a type of fuse, so not something big, $95!!! WT…!! I'm sure I got ripped off.

I had this thought the other day regarding property. Right now housing is insane, and for not much. Forcing both adults to work really high paying jobs. Given that the majority of those who own are Boomers also own a rental or two, they will soon start to sell en masse as they retire. Can we say glut? So anyone who's Gen-X and bought is basically FUBAR'd. Theres's no one coming up behind us who can buy our little dog boxes that were purchased for the price of something 50yrs ago in the Hamptons, and why would they bother, when they'll be able to buy something huge in Lower Manhattan for a song.

I can attest to your assertions from first-hand experience, Ed. They are absolutely true.

I was one of the lucky ones. I managed to do well enough in school, in a state with a generous enough scholarship program and in-state tuitions, to make it through a 4-year university education with only about $10K in student loan debt, which I paid off after living at home for a year — in the process also building up enough of a cash supply that I felt safe signing a lease on an apartment. I then lived in that apartment for four years, working in a field that paid rather well, all things considered — not quite six figures, but close.

I am a contractor, which these days and in this state is a nice way of saying 'permanent temp'. There are a number of large agencies here that 'hire' people, then contract them out to other large companies for work in this field on a "contract-to-permanent" basis: to wit, that you work for the client on a renewable contract basis, with them having the option to hire you on as a full-time employee at any point past the first X months.

After five years of working for the same client, I felt pretty secure that I would be there for the long haul, and was assured that they would hire me as soon as slots opened up on the team I was working on. So I finally decided it was time to be a little more serious about my housing situation, and signed the mortgage on a modest house after a few years of telling my constantly-nagging parents that no, getting myself into massive debt was NOT preferable to renting because being on the hook for $70K or more in the event of job loss was much worse than being on the hook for three months of rent (60 days notice plus early termination penalty). But, hey, after five years I was believing the "you're not gonna lose your job, they'd have tossed you by now if they were going to do that" line.

They terminated my contract the week after I signed my mortgage.

Fortunately, I'm damn good at what I do, and it was a layoff-style situation of them supposedly not having the budget to afford me anymore, rather than firing me for performance related reasons. I managed to get another job in my field within a week (a better job, actually), which I'm well aware was a damned miracle in this economy. I'm still a contractor, unfortunately.

So after five years of good, hard work and feeling secure, I finally went against my personal rule of No Debt Ever For Any Reason, and it IMMEDIATELY blew up in my face. I spent the first week in my new house, which should have been all full of happiness and excitement, going out of my fucking mind wondering how I was going to pay for this place if I didn't find another job quick.

It was the first time I ever violated that rule. It will be the last time. My top priority is to pay this thing off as quickly as possible, and I will not move or get a new vehicle until I can drop cash on them, no matter how long it takes to be able to do that. Because it's not worth it. It is an insanely dangerous thing to get into debt these days, because employment blows even when you can find it, and there is no security whatsoever. You can suddenly find yourself jobless and without income at any time, for any reason. Given that, you would have to be insane or stupid to purchase anything that would force you into a significant amount of debt.

The day after my new contract was confirmed, I informed my (boomer) parents that they had damned well better think twice before they EVER try to offer me financial advice again. Next time I won't be so pleasant about it.

Moving to NYC and getting rid of my car has been one of the most liberating things I've done in my adult life. Yes, my rent more than doubled but not having a car payment, insurance bills, maintenance bills, and gas expenses, I actually saved $100 per month.

It's really sad that the onetime symbol of American freedom is no longer that. Once I removed that symbol from my life, only then did I receive a sense of some financial freedom.

I'm 62, would love to retire, but all my savings were destroyed by Shrub's Great Recession, the little bit I had left over after being destroyed by Bush I's recession which was greatly reduced by Reagan's miniDepression. And the reason I have to rely on personal savings is because some schmuck decided that I would benefit by turning my future over to the tender mercies of Capitalism instead of having a pension.

So, it's a goddamned shame that one of you guys can't have my half decent job with bennies, but that's the way it is and tough shit. Get off your duff and elect liberals, 'cuz I'm sticking around until I can draw full Social Security (which btw has not a goddamned thing to do with the national debt you harp on about, look to the Military for that.)

And a car isn't that big a deal, the last one I bought has 180K+ miles on it and is gonn'a go for a while longer.

@Rudy: I did the "prudent" debt-free state-school thing and now I'm doing the "immediate resume dustbin" thing. I don't necessarily think I made the wrong choice, but neither am I about to lecture my indebted-but-employed peers for picking more prestigious schools than I did.

You can blame the boomers all you want, or you can blame the young'ins, but this is what economic contraction looks like. The American / European Empire is in decline, and oil at $100 a barrel is an economy-snuffer. As for unsolved mysteries — as long as the Haves can maintain the illusion that this is just a temporary hiccup or a failure of the Have-Nots then they can keep their wealth pretty much unmolested. Once the Have-Nots realize the prosperity shop is pretty much closed down and they don't get a couple of cars no matter how much they apply themselves – things could get interesting. If Egypt is interesting.

GunstarGreen said "It was the first time I ever violated that rule. It will be the last time. My top priority is to pay this thing off as quickly as possible, and I will not move or get a new vehicle until I can drop cash on them, no matter how long it takes to be able to do that. "

People who lived through the Great Depression had the same attitude.

They weren't wrong either.

Good article and good comments. (And, yes, I'm a Boomer who's gone through various vicissitudes and isn't taking up valuable space you require for other purposes.)

I can afford a better car than my 2007 Honda Civic (bought new). All I care about is: reliability, safety, and power windows and A/C. Oh and leather seats.

If I got a new car (in a few years or so) only thing I'd do differently is get a nav system. At that point it might be around the same price to get a lower end TSX as a souped up civic. We'll see. For now, I'm proud of my ride.

I absolutely loathe NYC from the bottom of my heart. It's ugly
And expensive and too big for me (wish I could move to a smaller city like Pitt or Austin). That said, I like the infrastructure so there's that.

I'm not into generational warfare. I just hate wealthy people or people with good jobs in general. My political philosophy is the obverse of FYIGM: Fuck You, I *Didn't* Get Mine.

1. My tastes run towards cars like Audi that I can't justify the expense of buying new. Even at my income level $40,000 is a metric fuckton of money for a car, and that's the low end of the Audi lineup.

2. Cars depreciate and they do most of their depreciation in the first 3 years. The car I'm driving now (2004 A8) was $72,000 when new. I paid $26,000 for it in 2008 as a dealer certified car with a warranty. It's been a great car for $26k. You'd have to be insane to pay $72k for one. It's nice but it ain't that nice.

3. Cars today are generally much more reliable than in previous years. At one time it was a very big deal for a car to go 100,000 miles. Today a well maintained car can easily go double that or even more.

@Gunstar; are you me? The exact same thing happened to me. Like Rudy, I chose to go to the state school with lower costs, but my Boomer co-worker just spent $70k a year putting his kid through art school in Boston (tuition plus apartment rental IN BOSTON plus Boston expenses plus iPhone with unlimited data plan) when there are perfectly good art schools in our state for a tenth that price and she could have lived in his McMansion in the suburbs while doing it. The kid graduated two years ago, and is working at a plant nursery part-time in the summers because–SURPRISE!!!–there's not much out there for an art-school grad.

A lot of us are in the same boat as recent college grad's. I live in my Mom's home – my father passed away 1 1/2 years ago.

I have a BA, and was working at part-time jobs from the age of 14 until I graduated from college. And after that, the longest I was ever out of work from full-time jobs, was about 3 weeks – and that was because I had to wait for a particular job, to open up.
Now, I've been out of work for almost 5 years from a job that paid a livable wage – and 3 1/2, from ANY job.
I've sent out hundreds and hundreds of resume's over the past few years – and – NOTHING!!!
No phone or live interviews.
NOTHING!!!!!!!!!!!!!!!!!!!!!!!!

Before damning us "Boomers" all with a broad-brush, talk to any of us late-"Boomers" about how we're doing.

If we're over 50, and don't have, or lose, a job, we have a 9% chance of finding another job.
NOT "A COMPARABLE" JOB.
"A" JOB!
9% !!!!!!!!!!!!!!!!!!!!!

No one is hiring those of us over 50 – no matter what our skill sets. I don't want to toot my own horn, but resume is not exactly unimpressive – or, I should say, WAS.

And no one has any plan for what to do with us – except, I suppose, hope that we die quickly and quietly.

When anyone asks me what I'll do for retirement, I tell them the following:
"Become a very incompetent criminal!
SO incompetent, that as soon as I'm let out of prison, I'm back before the next meal.
'Three-hot's-and-a-cot,' beats begging for change on the street, and "bum-fighting" for space under an overpass.

So, remember, not ALL of us "Baby Boomers" are out there getting shiny new cars for our retirement McMansions, to last us until we're on our way to "Assisted-living" retirement facilities.

As for what Ed was talking about, I'll paraphrase the GREAT Charles Pierce:
"People ain't got no f'in' money, 'cause people ain't got no f'in' jobs!!!"

I don't think I've ever been so depressed after reading this blog (my second favorite after Charles Pierce at Esquire) and the comment section.

The problems facing us at all levels are overwhelming. To avoid a dystopian future there needs to be an unprecedented change in how society encourages individuals to cooperate. As Charles Pierce emphasizes: "Commonwealth". We need to realize that we're all in this together.

It's not going to happen. The human race hasn't demonstrated the ability to cooperate on that level so far and I don't see it happening in the future. We're – the collective we – are screwed.

As a GenXer with a house, car, job, benefits, and pension, I did so with loads of debt, marrying into spendthrift attempts at The American Dream, getting divorced, being depressed, living with mom, inheriting money and the house, and years of working a shitty job I hated. At a prison. If I could have skipped a decade of that, I wouldn't have the experience necessary for my better job.

I have nothing to complain about, but life still sucks.

We need to make it possible for old people to retire. That's the other thing that happened in the Great Recession: retirement accounts got wiped out. The promise of the 401-K has been shown to be a great way for money managers to retire comfortably. Social Security isn't the greatest retirement system, but it wasn't designed to be. It was intended to keep old people shopping in the people food aisles of the grocery stores. It's very successful. It was supposed to be there to keep old people from starving. It works. We need a national pension system that people can invest in (and employers can use, too.) Having it be transferable would be the greatest innovation possible. Why do government workers get it all? Because we're fucking lucky, that's why. (Unless we're in Wisconsin, recent hires in Arizona, or… watch out, Detroit!)

But don't you know if you get an education and a degree, you'll have no trouble getting and keeping a job?? Then again even if you find a job that isn't fast food, that "Mercedes" payment on your student loan will have you riding the bus.

c u n d gulag got it right, back in the day (when the boomers were entering the work force), finding a job wasn't a problem. Most places you could find a job by walking or driving down the streets and looking for the help wanted signs. The only times I was unemployed for any length of time was when I wanted to remain unemployed for awhile. And then I would find work before the unemployment checks stopped.

Lydia Pennyfeather: I still don't get why Zipcar exists. Wouldn't it be far cheaper to take mass transit to Target and a taxi home? Or just not shop at Target and pay slightly higher prices in exchange for lower transport costs and less time spent?

I see a fair amount of people pointing out that, while the current generation doesn't want to buy cars, they have no problems buying the latest iPhones, clothing and trips etc. I suspect this line of reasoning is right along the lines of "How can they be poor if they can afford a television and a refrigerator!?", but that's beside the point.

Cars are a huge money sink. Aside from the depreciation over time, and potential leasing payments, cars require insurance, gas and repairs, all of which can add up really quickly at extremely inopportune times. iPhones are a fraction of the price and a 2 year contract =/= a 60 month lease, clothing has 0 maintenance costs and trips are the same thing.

I mean we all know this, but cars are in the same class as home-buying when it comes to investing in them.

I know a handful of exceptions, but the current generation is growing up in an economy worse in some ways than the Great Depression that my parents graduated into. If nothing else, my dad's CCNY and mom's Hunter College tuitions were zip and zero respectively. Every year, public college tuition has gone up as local governments have dropped support. Meanwhile, wages have fallen. The past three decades have been a story in disinvestment, liquidation and stagnation.

Of course kids aren't buying cars these days. They can't afford them. They aren't going to be buying houses either, for the same reason. (They will buy lots of beer and low end "luxuries". A cell phone is, of course, a necessity these days, and fairly cheap.)

When I bought a new car in 2010 (back when I had steady employment and decided to gamble on a monthly payment for something with a great warranty over spending less and having a third used car in a row require more in repairs than the vehicle was worth), Hyundai had a program where if you lost your job within the year, they'd take the car back and undo the deal. I don't know if they're still running it, but I bet a lot more young people would buy new cars if manufacturers offered similar programs.

I would like to propose another explanation for the failure of certain brands of American cars in the last couple of decades.

Chevy and Ford are working class cars. Cadillac and Lincoln are upper class cars. The brands that no longer exist- Oldsmobile, Pontiac, Mercury- were between these two groups. They were middle class cars. And as the middle class in this country is being strangled to death, it is no wonder that these brands no longer have enough customers to continue to exist.

@ Rudy.
"I would contend that "most" millennials seems to almost fetishize what they perceive to be prestigious universities"

The "fetish" is that they're much more likely to get a job that has some potential to make them successful. A free degree doesn't mean shit if you're still unemployable. Look up Paul Campos at LGM, The majority of law graduates are not finding legal jobs, and if you think you can get into medical school or finance with a degree from a party school, you're high.